Sept. 26 (Bloomberg) -- West Texas Intermediate crude
rebounded from the lowest level in 12 weeks. Iran’s diplomatic
efforts to end international sanctions may have only a limited
impact on oil prices, Bank of America said.

Futures rose after sliding 0.5 percent yesterday following
a government report that showed an unexpected increase in U.S.
crude stockpiles. Iranian President Hassan Rouhani’s trip to the
United Nations in New York this week raised hope for renewed
talks on its nuclear program and sanctions, though no official
meetings have been scheduled between U.S. President Barack Obama
and Rouhani.

“The political risk premium has largely been withdrawn
from the market over the past couple of weeks,” said Abhishek
Deshpande, an oil market analyst at Natixis SA in London. “But
with the situation in Egypt, Syria and Iran still far from
resolved, the market may have gotten a little ahead of itself in
pushing prices lower.”

WTI for November delivery was up 42 cents at $103.08 a
barrel on the New York Mercantile Exchange as of 1:51 p.m.
London time, after falling by 46 cents earlier today. WTI
settled yesterday at the lowest close since July 3. The volume
of all futures traded was 42 percent below the 100-day average.
Prices are up 5.2 percent this quarter and 12 percent higher in
2013.

Brent for November settlement rose 67 cents to $108.99 a
barrel on the London-based ICE Futures Europe exchange. The
European benchmark was at a $5.90 premium to WTI, widening from
$5.66 yesterday, which was the biggest since Sept. 5.

U.S. Stockpiles

Crude inventories climbed for the first time in four weeks,
gaining 2.64 million barrels, according to data from the Energy
Information Administration. Analysts polled by Bloomberg had
forecast a 1 million-barrel decrease.

The stockpile rebounded to 358.3 million barrels from 355.6
million the prior week, which was the lowest since March 2012,
the Energy Department’s statistical arm said. Total petroleum
demand fell 2.8 percent to 19.3 million barrels a day, and
refineries reduced their utilization rate to 90.3 percent, the
lowest level since Aug. 9.

While crude stockpiles rose nationwide, the inventory tally
at Cushing, Oklahoma, slipped 412,000 barrels to 32.8 million on
Sept. 20, the lowest since February 2012, the report showed.
Supplies at the delivery point for WTI have tumbled 34 percent
since June 28 and dropped for 12 weeks in a row.

Rouhani Trip

Rouhani, elected on a pledge to ease Iran’s global
isolation, has used this week’s trip to the UN to emphasize his
differences from his predecessor Mahmoud Ahmadinejad and prepare
the ground for renewed talks on the nation’s nuclear program.

The new president said in his address to the General
Assembly on Sept. 24 that Iran is ready to engage in “result-oriented” talks on the nuclear program while offering no
concessions. He called Iran’s goals peaceful and said nuclear
weapons have no place in his country’s doctrine.

A “new approach” to negotiations will start today with
foreign ministers from the U.S. and Iran meet in New York, said
Abbas Araghchi, a deputy foreign minister and member of nuclear
negotiating team, according to state-run Mehr news agency.

There’s a “new determination” among officials from Iran,
U.S., U.K., France, Russia, China and Germany, Araghchi said.
Iran wants an agreement on framework and identification of the
goal, followed by mutual steps to achieve it, he said.

U.S. Secretary of State John Kerry will meet Iranian
Foreign Minister Javad Zarif today in the highest-level formal
talks between the two nations in over three decades, joined by
counterparts from the other five powers and the European Union’s
foreign policy chief Catherine Ashton.

Slow Process

“It’s a gradual process over that period, but Rouhani does
sound like he is sincere,” said Bjarne Schieldrop, chief
commodity analyst at SEB AB in Oslo.

Even with diplomatic progress, a return of Iranian oil is
only a “moderate” risk to the oil market, BofA Merrill Lynch
said in an e-mailed report dated yesterday. Rouhani’s
“diplomatic push to end the embargo, if and when that happens,
may end up having less than a $10 a barrel impact on oil
prices,” BofA’s head of global commodity research Francisco
Blanch said in the report.

WTI rose to a two-year high on Aug. 28 amid concern that a
U.S.-led assault against Syria would lead to a disruption of
Middle East oil exports. The region accounted for 35 percent of
global oil output in the first quarter of this year, according
to the International Energy Agency.

UN Deal

The U.S. and Russia reached a framework deal on Sept. 14
that averted a military strike to punish Syria for what the U.S.
says was an Aug. 21 chemical weapons attack by government forces
that killed more than 1,400 people.

The UN Security Council’s five permanent members have
agreed on the most important elements of a draft resolution
requiring Syria to surrender its chemical weapons, according to
a UN diplomat. A vote on adopting the resolution may take place
as soon as this week, said the diplomat, who asked not to be
identified because the negotiations are confidential.

Libya’s Zawiya port exported its first crude cargo this
month on Sept. 24, after flows were restored from oil fields
that supply the terminal, an official at the local refinery said
yesterday. Several other ports, including the largest, Es Sider,
remained shut.